Benchmarks make gap-up opening amid firm global cues

With a gap up opening Indian equity markets have recovered most of their previous session losses and are now trading in fine fettle with gains of around half a percent, tracking strong global cues. The sentiments were upbeat with growth in eight core sectors rising to 4-month high of 3.2 percent in September because of sharp pick-up in fertiliser production and electricity generation. Further, appreciation in Indian rupee against dollar too supported the markets. The rupee rose by 19 paise to 65.40 against the US dollar in early trade today, at the Interbank Foreign Exchange, on fresh selling of the American currency by exporters and banks. At present, Sensex and Nifty were trading above the crucial 26,650 and 8,050 levels respectively. Apart from blue chips, the broader markets too are trading higher with BSE Midcap and Smallcap indices up by around half a percent each.

On the global front, the US markets ended higher with energy, health-care and financial stocks leading solid gains. Investors welcomed a spate of deals and earnings results. The Asian markets were trading in green following the overnight rally on Wall Street as well as the positive cues from European markets. The markets in Japan are closed for the Culture Day holiday.

In the scrip specific development, Harita Seating Systems soared 18% on the NSE, after the company reported three-fold jump in net profit at Rs 4.48 crore for the quarter ended September 30, 2015 (Q2), on back of one-time gain on sale of the two wheeler seat business of the Nalagarh unit.

Closer home, all the sectoral indices on the BSE, barring Consumer Durables, are trading in green led by Metal, Power, IT, PSU. The market breadth on BSE was positive in the ratio of 1174: 395 while 60 scrips remained unchanged. 

The BSE Sensex is currently trading at 26691.74, up by 132.59 points or 0.50% after trading in a range of 26630.59 and 26732.24. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index gained 0.69%.

The top gaining sectoral indices on the BSE were Metal up by 1.30%, Power up by 0.99%, IT up by 0.65%, PSU up by 0.64% and TECK up by 0.56%, while Consumer Durables down by 0.17% was the only losing index on the BSE.

The top gainers on the Sensex were Vedanta up by 3.15%, Hindalco up by 2.96%, NTPC up by 1.62%, Tata Steel up by 1.47% and Mahindra & Mahindra up by 1.05%. On the flip side, Lupin down by 1.14%, GAIL India down by 0.27%, Bharti Airtel down by 0.26%, Maruti Suzuki down by 0.22% and ONGC down by 0.08% were the top losers.

Meanwhile, global rating agency, Moody's Investors Services has reiterated its stand, projecting stable growth rate for India and has said that the Indian economy would grow at 7.5 percent in the current fiscal and improve marginally in the following year. It said “We expect that India’s real GDP will grow at 7.5 percent in the financial year ending March 31, 2016 (FY16) and 7.6 percent in FY17,” it further added that these growth rates would be slightly faster than the 7.4 percent recorded in FY15 and substantially better than from FY12 to FY14.”

In its report it also pointed that India’s average annual expansion of 7.7 percent over the past decade is one of the fastest growth rates globally, as its favorable demographics and the opportunities afforded by a large and diverse national market with high levels of savings have overcome the effects of weak physical infrastructure and sometimes disjointed policies. However, during this long growth period, the country experienced a significant slowdown in FY12-13 driven in part by policy bottlenecks impacting project investments. Though, in past two years (FY14-FY15), some of these problems were addressed. There has been a focus on improving the ease of doing business, particularly with respect to approvals required from the government.

The report also highlighted that in contrast to a few other emerging markets, India is a key beneficiary of decline in commodity prices, especially oil and noted that India has weathered the recent volatility in emerging markets much better than peers, as seen in the relatively modest deterioration in the currency, 'indicating that investor sentiment remains supportive' of the country's economic outlook. Further, there has also been a pick-up in public-sector investments, particularly in areas such as railways and roads, to compensate for the weak levels of private-sector capital investment, it added.

Moody's further said that Reserve Bank will likely maintain its accommodative stance over the outlook horizon, supporting the operating environment for banks and added that an accommodative monetary policy should support the growth environment.

The CNX Nifty is currently trading at 8086.15, up by 35.35 points or 0.44% after trading in a range of 8069.90 and 8100.35. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.94%, Hindalco up by 2.84%, PNB up by 1.97%, ACC up by 1.73% and NTPC up by 1.70%. On the flip side, Lupin down by 1.04%, Asian Paints down by 0.84%, GAIL India down by 0.64%, Tata Motors down by 0.52% and Maruti Suzuki down by 0.22% were the top losers.

Asian markets were trading in green, Shanghai Composite increased 0.58 points or 0.02% to 3,325.67, FTSE Bursa Malaysia KLCI increased 5.67 points or 0.34% to 1,669.74, KOSPI Index increased 10.89 points or 0.54% to 2,046.13, Jakarta Composite increased 58.38 points or 1.31% to 4,523.34, Taiwan Weighted increased 89.96 points or 1.04% to 8,704.73 and Hang Seng increased 320.05 points or 1.43% to 22,690.09.